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A, B and C share profits in the ratio 5:3:2. C retires, and the new profit-sharing ratio of A and B becomes 7:3. What is B’s gaining share?

Answer and explanation

Correct answer: Zero

B’s old share was \(\frac{3}{10}\), and under the new ratio 7:3, B’s share is still \(\frac{3}{10}\). Therefore, gaining share = new share − old share = \(\frac{3}{10}-\frac{3}{10}=0\). The option \(\frac{3}{10}\) represents B’s new share, not the gain. In such questions, calculate the gaining share by subtracting the old share from the new share.

Related tags

Partnership AccountsRetirement Of PartnerNew RatioGaining ShareProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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